Nancy is a self-employed consultant who uses 10% of her residence as an office. The office is used exclusively for business and is frequented by customers on a regular basis. Nancy also uses her den as an office (12% of the total floor space of her home) to prepare bills and keep records. However, the den is also used by her children as a TV room. In 2022, Nancy’s net income from the consulting business (other than her home office expenses) amounts to $40,000 in 2022. She also incurs $1,400 of expenses directly related to the office (e.g., painting of the office, window blinds). Nancy incurs the following expenses in 2022 related to her residence:

Real estate taxes......................................................$ 2,000
Mortgage interest.......................................................5,000
Insurance........................................................................500
Depreciation...............................................................3,500
Repairs and utilities..................................................1,000
Total........................................................................$12,000

a. Which of the expenditures above (if any) are deductible for 2022? Are they for AGI or from AGI deductions?
b. Would your answer to Part a change if Nancy’s net income from consulting were only $2,500 for the year?